KCAP » Topics » Section 5.3 Delivery of Loan Files

This excerpt taken from the KCAP 10-K filed Mar 29, 2007.

Section 5.3 Delivery of Loan Files

(a) The Borrower, or the Servicer on its behalf, shall deliver possession of all “instruments” (within the meaning of Article 9 of the UCC) not constituting part of “chattel paper” (within the meaning of Article 9 of the UCC) that evidence any Transferred Loan set forth on a Loan List, including all Underlying Notes (other than in the case of Noteless Loans), and all portions of the Loan Files to the Trustee on behalf of the Secured Parties prior to the applicable Funding Dates, in each case endorsed in blank or to the Agent, without recourse; provided that notwithstanding the foregoing, with respect to any Pre-Positioned Loan, the Borrower shall (i) (other than in the case of a Noteless Loan) have a copy of the executed Underlying Note faxed to the Trustee on the applicable Funding Date and cause the original to be received by the Trustee within two Business Days after such Funding Date and (ii) within ten Business Days of the Funding Date deliver all other portions of the Loan File in each case endorsed in blank without recourse, where applicable. Pursuant to Section 7.10, the Borrower is required to deliver such instruments and Loan Files to the Trustee for the benefit of the Secured Parties. Accordingly, the Borrower hereby authorizes and directs the Servicer to deliver possession of all such instruments and Loan Files to the Trustee on behalf of the Secured Parties, and agrees that such delivery shall satisfy the condition set forth in the first sentence of this Section 5.3(a). The Servicer shall also identify on the Loan List (including any amendment thereof), whether by attached schedule or marking or other effective identifying designation, all Transferred Loans that are not evidenced by such instruments.

(b) Prior to the occurrence of a Termination Event or Servicer Termination Event, the Trustee shall not record the Assignments of Mortgage delivered pursuant to Section 5.3(a) and the definition of Loan Documents. Upon the occurrence of a Termination Event or a Servicer Termination Event, the Trustee shall, if so directed by the Agent, cause to be recorded in the appropriate offices each Assignment of Mortgage delivered to it with respect to all Transferred Loans except those Transferred Loans covered by the proviso to the definition of Assignment of Mortgage. Each such recording shall be at the expense of the Servicer; provided that to the extent the Servicer does not pay such expenses, the Trustee shall be reimbursed pursuant to the provisions of Section 2.8.

 

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These excerpts taken from the KCAP 8-K filed Feb 16, 2007.

Section 6.2 Delivery of Loan Files.

(a) The Seller shall deliver, on behalf of the Buyer, possession of all “instruments” (within the meaning of Article 9 of the UCC) not constituting part of “chattel paper” (within the meaning of Article 9 of the UCC) that evidence any Purchased Asset set forth on a Loan List, including all Underlying Notes, and all portions of the Loan Files to the Trustee on behalf of the Secured Parties prior to the applicable Purchase Dates in each case endorsed in blank without recourse; provided that notwithstanding the foregoing, in connection with any Pre-Positioned Loan to be purchased by the Seller, the Seller shall (i) (other than in the case of a Noteless Loan) have a copy of the executed Underlying Note faxed to the Trustee on the applicable Purchase Date with the original to be received by the Trustee within two Business Days after such Purchase Date and (ii) within ten Business Days of the Purchase Date deliver all other portions of the Loan File to the Trustee, in each case endorsed in blank without recourse, where applicable. Pursuant to Section 5.3 of the Loan Funding Agreement, the Seller is required to deliver such instruments and Loan Files to the Trustee for the benefit of the Secured Parties. Accordingly, the Seller shall deliver possession of all such instruments and Loan Files to the Trustee on behalf of the Buyer and for the benefit of the Secured Parties, and agrees that such delivery shall satisfy the condition set forth in the first sentence of this Section 6.2(a). The Seller shall also identify on the Loan List (including any amendment thereof), whether by attached schedule or marking or other effective identifying designation, all Purchased Assets that are not evidenced by such instruments. Notwithstanding anything to the contrary in this Section 6.2, any such documents or instruments required to be delivered hereunder shall not include any equity purchase warrants or similar rights convertible into or exchangeable or exerciseable for any equity interests received by the Seller as an “equity kicker” from any Obligor in connection with such Purchased Assets.

(b) Prior to the occurrence of a Termination Event or Servicer Termination Event, the Trustee shall not record the Assignments of Mortgage delivered pursuant to Section 6.2(a) and the definition of Loan Documents. Upon the occurrence of a Termination Event or a Servicer Termination Event, the Trustee shall cause to be recorded in the appropriate offices each Assignment of Mortgage delivered to it with respect to all Purchased Assets except those Purchased Assets covered by the proviso to the definition of Assignment of Mortgage. Each such recording shall be at the expense of the initial Servicer; provided that to the extent the initial Servicer does not pay such expenses, the Trustee shall be reimbursed pursuant to the provisions of Section 2.8 of the Loan Funding Agreement.

Section 6.3 Release of Released Amounts. Immediately upon the release to the Buyer by the Trustee on behalf of the Secured Parties and the other Secured Parties of the Released Amounts, the Buyer hereby irrevocably agrees to release to the Seller such Released

 

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Amounts, which release shall be automatic and shall require no further act by the Buyer; provided that the Buyer shall execute and deliver such instruments of release and assignment, or otherwise confirming the foregoing release of any Released Amounts, as may be reasonably requested by the Seller.

Section 5.3 Delivery of Loan Files

(a) The Borrower, or the Servicer on its behalf, shall deliver possession of all “instruments” (within the meaning of Article 9 of the UCC) not constituting part of “chattel paper” (within the meaning of Article 9 of the UCC) that evidence any Transferred Loan set forth on a Loan List, including all Underlying Notes (other than in the case of Noteless Loans), and all portions of the Loan Files to the Trustee on behalf of the Secured Parties prior to the applicable Funding Dates, in each case endorsed in blank or to the Agent, without recourse; provided that notwithstanding the foregoing, with respect to any Pre-Positioned Loan, the Borrower shall (i) (other than in the case of a Noteless Loan) have a copy of the executed Underlying Note faxed to the Trustee on the applicable Funding Date and cause the original to be received by the Trustee within two Business Days after such Funding Date and (ii) within ten Business Days of the Funding Date deliver all other portions of the Loan File in each case endorsed in blank without recourse, where applicable. Pursuant to Section 7.10, the Borrower is required to deliver such instruments and Loan Files to the Trustee for the benefit of the Secured Parties. Accordingly, the Borrower hereby authorizes and directs the Servicer to deliver possession of all such instruments and Loan Files to the Trustee on behalf of the Secured Parties, and agrees that such delivery shall satisfy the condition set forth in the first sentence of this Section 5.3(a). The Servicer shall also identify on the Loan List (including any amendment thereof), whether by attached schedule or marking or other effective identifying designation, all Transferred Loans that are not evidenced by such instruments.

(b) Prior to the occurrence of a Termination Event or Servicer Termination Event, the Trustee shall not record the Assignments of Mortgage delivered pursuant to Section 5.3(a) and the definition of Loan Documents. Upon the occurrence of a Termination Event or a Servicer Termination Event, the Trustee shall, if so directed by the Agent, cause to be recorded in the appropriate offices each Assignment of Mortgage delivered to it with respect to all Transferred Loans except those Transferred Loans covered by the proviso to the definition of Assignment of Mortgage. Each such recording shall be at the expense of the Servicer; provided that to the extent the Servicer does not pay such expenses, the Trustee shall be reimbursed pursuant to the provisions of Section 2.8.

 

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